ADR Update: Are We Still Trying to Figure Out Concepcion?

By Barbara Reeves Neal

Barbara Reeves Neal is a full-time arbitrator, mediator and special master with JAMS, based in Los Angeles. Ms. Neal, a graduate of Harvard Law School, has practiced as a prosecutor with the US Department of Justice, a partner with Morrison & Foerster, and Associate General Counsel of Southern California Edison and Edison International. Her practice at JAMS focuses on the areas of commercial, insurance, employment, unfair competition, and construction law.

As readers of this column know, my colleague Joel Grossman and I have repeatedly addressed the issues raised by AT&T Mobility LLC v. Concepcion.¹ Only last November, Joel addressed whether § 7 rights under the National Labor Relations Act or the "effective vindication" doctrine could be used to bar class action waivers. At the same time, the California Supreme Court and the Ninth Circuit handed down decisions exploring the application of Concepcion to arbitration agreements that purported to restrict rights held dear by California employees and consumers. The first, Sonic-Calabasas A, Inc. v. Moreno,² examined an arbitration agreement that took away an administrative hearing, the so-called "Berman hearing," available to an employee seeking unpaid wages. The second, Ferguson v. Corinthian Colleges, Inc.,³ examined the Broughton-Cruz rule, which has been used to exempt claims for "public injunctive relief" from arbitration. The third case, Chavarria v. Ralphs Grocery Co.,⁴ in which the court found Ralphs’s arbitration agreement so one-sided as to "shock the conscience," is noteworthy because it reminds us that not everyone has gotten the message about the need for fairness in drafting employment arbitration agreements.

The discussion below will summarize the decisions and note some of the inconsistencies that still seem to exist between the California Supreme Court and the federal courts as they try to figure out Concepcion in the context of California employment law.